Construction Starts Flatline, Manufacturing Accelerates
Date Posted: February 28, 2024
Posted In: Discussion, Regionalism, Workforce,
From Construction Dive: Total construction starts ticked up 1% in January to a seasonally adjusted annual rate of $1.16 trillion, according to Dodge Construction Network.
Even with December’s big bounce where starts rebounded 20% off of a 10-month low in November, the marginal uptick in January means construction activity is still just barely treading water over the past year and is about 1% lower than in January 2023.
“Construction starts are struggling to make headway in the new year,” said Richard Branch, chief economist for Dodge Construction Network. “Construction starts will continue to struggle early on in 2024 as higher interest rates and tight credit standards are slowing down projects moving through the planning cycle to start.”
Dive Insight:
Despite this year’s initial sluggishness, Branch said expected interest rate cuts in the second half of 2024 should push some of these projects in the planning queue through to break ground, leading to a rising trend in construction activity as the year progresses.
But until those cuts provide some relief, construction activity could remain somewhat hamstrung. The American Institute of Architects’ Architecture Billings Index, which tracks architectural design activity and leads actual construction by nine to 12 months, signaled continued softness as business conditions remained on a decline, said Kermit Baker, AIA chief economist.